While new vehicle sales have seen growth in the first quarter of 2024, there is a more nuanced story happening at the segment level. And it’s cause for concern for a leading industry observer.
DesRosiers Automotive Consultants has found significant disparities between the luxury and mass market segments.
Mass market vehicles saw a robust increase of 18.7 per cent, but the luxury sector experienced a decline of 7.3 per cent. Notably, luxury cars dropped by 29.1 per cent and compact luxury cars decreased by 19.7 per cent, making them two of the three worst-performing segments for the quarter.
Conversely, subcompact SUVs surged ahead, outpacing the overall market with a 58.2 per cent increase in sales, driven by strong performances from models like the Chevy Trax, Nissan Qashqai, and Hyundai Kona. Sports cars also enjoyed substantial growth, with a 48.3 per cent increase led by the VW Golf R, the group reported.
In terms of vehicle types, light trucks continued to outperform passenger cars, capturing 86.8 per cent of the market with 348,000 units sold, an increase of 16.2 per cent. Passenger cars also saw growth, though more modest, with a 10 per cent increase to 53,000 units sold.
Despite these positive figures, DAC expressed concerns about the stability of the vehicle market.
“There are a number of warning signs appearing even in the mainstream market — incentives are climbing, sub-vented leasing has reappeared and consumers are increasingly pushing back against the ‘trimflation’ seen in 2022-23,” said Andrew King, managing partner at DesRosiers.
The firm noted that it is closely monitoring the market for signs of a potential tipping point where high interest rates, escalating vehicle prices and a sluggish economy might outweigh pent-up demand.
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